Dollar Steady as Fed and BOJ Meet Amid Rate Hike Expectations

The dollar held steady on Monday as investors awaited key meetings from major central banks. The Federal Reserve's decision is set for Wednesday, and many expect a rate hike, which has already been priced in at an 86% chance by traders according to the CME FedWatch tool.

The Bank of Japan is expected to raise rates on Friday, following last week's rate increase from the European Central Bank. The ECB warned that further hikes may be necessary, amid rising inflation concerns.

The Japanese yen has risen sharply in recent weeks, reaching a seven-month high near 152.89 against the dollar. Analysts at MUFG said a 25-basis-point hike is already priced in, but for the yen to strengthen further, the BOJ must signal faster hikes.